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ACP-EU COTONOU AGREEMENT
AFRICAN, CARIBBEAN AND COUNCIL OF
PACIFIC GROUP OF STATES THE EUROPEAN UNION
SUMMARY RECORD
Brussels, 27 April 2010
ACP/61/016/10 ACP-CE 2116/10
of: 67th meeting of the ACP-EU Sub-Committee on Trade Cooperation
on: 16 April 2010
at: ACP House, 451 Avenue George Henri, 1200 Brussels
Subject: Summary record of the 67th meeting of the ACP-EU Sub-Committee on Trade
Cooperation
The ACP-EU Sub-Committee on Trade Cooperation held its 67th meeting at the ACP House on 16 April 2010.
The meeting was co-chaired by H. E. Ambassador Daniel EVINA ABEE of Cameroon for the ACP side and by Mr Peter THOMPSON, Director in the Directorate-General for Trade of the European Commission, for the EU side.
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1.Adoption of the agenda
The agenda as set out in [ACP/61/006/10 Rev 2 - ACP-CE 2112/10] was adopted.
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2.Approval of the summary record of the previous meeting
The summary record of the previous meeting [ACP/61/021/09 - ACP-CE 2109/09] was approved.
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The ACP side requested updates on some of the subjects discussed during that meeting:
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a.EU Regulation 1005/2008 on Illegal, Unreported and Unregulated (IUU) Fishing.
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b.Trade and Climate Change.
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c.Renewable energy directive, pesticide directive and classification of nickel compounds.
In its reply, the Commission mentioned the following developments:
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-Concerning the Council Regulation on IUU Fishing, which entered into force on 1 January 2010, the Commission adopted Implementing Regulation 1010/2009 on 22 October 2009. A handbook had been drafted giving practical advice for the implementation. It had been developed for both industry and authorities in third countries and in Member States and is available on DG MARE's website.
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-Regarding the issue of Trade and Climate Change, the Commission underlined the good work which had led to the adoption of the ACP-EU Declaration ahead of the Copenhagen conference. Further regular policy dialogue is taking place in the Committee of Ambassadors. The Commission stands ready to support the adaptation process in ACP countries.
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-Regarding the Renewable Energy Directive, the Commission informed the SubCommittee that EU Member States must transpose the Directive by the end of 2010. Only then will sustainability criteria - which are currently being finalised - apply. The Commission had held a public consultation on the definition of biodiverse grassland and would present a report on indirect land use change in 2010. It intended to continue dialogue and exchange with third parties.
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-On the Pesticides Directive, Regulation 1107/2009 had been adopted in October 2009 and its provisions would apply as from June 2011. The Commission did not expect any major sudden impact on accepted active substances.
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-Concerning nickel, the Commission reminded the Sub-Committee of the classification of some nickel compounds during 2009, and reiterated its willingness to continue discussions with the industry or third countries. However, recent international analysis had confirmed earlier findings on the carcinogenic nature of nickel.
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The representative of the Dominican Republic observed that the classification of nickel as a dangerous substance would have severe market consequences and affect business for the ACP States concerned. She expressed the hope that the Commission would consider reviewing the classification.
The ACP side thanked the Commission for providing a useful update and would reflect on the new information. If necessary, it would seek further information or seek to hold appropriate consultations.
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3.EPAs: State of Play and way forward
The Commission gave a report on results achieved and progress made over the last year, notably the signatures of:
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-interim EPAs by four SADC countries, four ESA countries and Fiji,
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-the comprehensive CARIFORUM EPA by Haiti,
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-deal on services investment by Bahamas.
The Commission noted that it is urgent for all countries that have not yet signed an interim EPA to do so without further delay, in order to protect signatories from legal challenges in WTO, increase predictability for economic operators and finally, maintain fairness to neighbouring ACP countries that had signed and are implementing their obligations.
The Commission representative outlined five guiding principles for the continuation of negotiations:
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-firstly, the need to identify tailor-made solutions adapted to every region;
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-secondly, the intention to craft EPAs so as to support on-going regional integration processes, as e.g. the EU is doing in the case of the SADC iEPA with the proposed alignment on certain TDCA tariffs;
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-thirdly, the ambition to include trade-related rules and services, but allowing differentiated outcomes and the use of rendez-vous clauses;
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-fourthly, to provide flexibility in the agreements, by including asymmetry, safeguards and protection of sensitive sectors in order to allow ACP to adapt to specific problems;
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-and finally, the need to make parallel progress towards accompanying measures.
In this respect the Commission recalled the good progress made by the EU towards its Aid for Trade commitments.
The ACP side in its response noted the confusion caused by different trade regimes applicable for one region, which requires some harmonization. To this effect, ACP called on the EU to show goodwill and flexibility and relax some of the conditions that are difficult for them to accept. The ACP side suggested that it was necessary to make the EPAs inclusive to embrace all ACP States.
The representative of Samoa, while appreciating the update provided, sought to know whether the adjustment costs of EPAs would be addressed under the general cover of aid for trade or if there would be a separate allocation.
The representative of Mauritius asked for an outlook on accompanying measures for EPAs and enquired if resources would be ring-fenced for this purpose when considering the new multi-annual framework.
The representative of Namibia disagreed with the Commission on the need to sign the interim EPA, which he did not consider supportive of the regional integration process. He called for the parties to continue the comprehensive EPA negotiations, instead of signing the iEPA first.
The Commission representative explained that financing beyond 2013 had not been yet decided, but stated that he expected that EU development resources including adequate support for ACP would continue to be available. He underlined that at this stage the problem was rather one of absorptive capacity than of unavailability of funding.
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The Commission expressed perplexity over the position of Namibia, referring to the fact that the EU had already granted duty-free quota-free access to the ACP countries from the time of initialling and had also provided additional reassurances on the regional negotiations. While the Commission recognised that every country had the sovereign right to reconsider its decision and resolve not to sign, the current situation was untenable and did not provide predictability for business.
The representative of Namibia reiterated his country’s wish to conclude a comprehensive EPA before signing any agreement. He expressed the view that Namibia was already reciprocating trade liberalization towards the EU, as Namibia was implementing de facto the TDCA regime. In his view, this could not be challenged in the WTO.
The ACP side expressed their hope that the obstacles mentioned would be duly taken into account in the spirit of the joint partnership, and called again for flexibility on the EU side. The ACP side called for the issue to be placed on the agenda of the ACP-EU Joint Ministerial Trade Committee when it meets.
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4.EU trade negotiations with third countries
The ACP side recalled that developments since the last meeting had caused consternation on the ACP side. The ACP felt that the signature of the FTA between Europe and Colombia and Peru significantly eroded ACP preferences for key commodities, placed ACP suppliers in an uncompetitive situation and nullified some of the perceived benefits of the EPAs.
ACP also complained about the failure of the EU to conduct formal, inclusive consultations as provided for in Article 12 of the Cotonou Partnership Agreement (CPA).
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On behalf of the ACP side, the Chair of the ACP Banana Working Group, the Ambassador of Suriname, expressed his disappointment with the concessions made by the EU to Colombia and Peru regarding bananas and voiced his concern about additional surprises with respect to Central America negotiations and Banana Accompanying Measures (BAM). He welcomed the Tenerife JPA declaration on bananas which, in his view, confirmed that EU MEPs shared the ACP's conclusions.
The Commission representative briefly explained the terms of the EU's FTA with Peru and Colombia regarding the commodities of main interest to ACP: bananas, sugar, rum and rice.
The representative of Mauritius referred to an ACP letter to the Commission of 15 March 2010 and welcomed the positive elements contained in the response received even though there was still a need to clarify some of the issues. He also criticised the EU's way of consulting with the ACP and underlined that in his view, true consultations did not mean simply informing the other side, but should include taking due account of their concerns, as not doing so affected the balance of rights and obligations achieved in the EPAs. If the trend continued, the EPAs would lose commercial value.
The representative of Jamaica recalled that the EU needed to strike the right balance between EU commitments to the ACP and towards third parties. She recalled that in the recently revised Cotonou Agreement, the EU undertook to take all measures to reduce the impact of preference erosion. She stated that the FTA with Latin America would, in the case of rum, reduce the competitive position of the Caribbean countries, with the result that the resources utilised under the 8th EDF Caribbean Rum programme would have been wasted.
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The Commission underlined that several dedicated consultation meetings on these negotiations had taken place at the request of the EU. The Commission representative also noted that any tariff concessions made would cut into ACP preferences. He illustrated how the EU took account of ACP concerns by agreeing on limited tariff reductions and quotas, negotiating extensive transition periods and providing accompanying measures to promote ACP competitiveness. The Commission representative further emphasized that in any negotiation, the final result would be found in the middle ground between offers and requests. He stressed that with Central America, the EU's present offer was a tariff of 95€/t after 10 years' transition.
The Commission also informed the Sub-Committee that it was conscious of the JPA declaration and was carefully examining it. The Commission appreciated the importance of these commodities for ACP countries and was satisfied that it had done everything it could to safeguard ACP interests.
The representatives of Jamaica, Mauritius, Suriname and Zimbabwe insisted that they expected more of Article 12 consultations, in particular in terms of timely information and consideration of their positions by the EU.
The representative of the Dominican Republic underlined that ACP were aware of the facts regarding trade liberalisation and preference erosion, but considered the liberalisation agreed in the FTA with Latin America as unnecessarily aggressive, unbalanced and violent.
The Commission representative argued that the EU side had taken account of ACP interests by, for example, maintaining ACP tariff preferences for bulk rum, which represents 75% of ACP exports and by agreeing only limited tariff reductions on bananas, in this FTA. He pointed to the different interpretation of Article 12 consultations and concluded that by nature trade negotiations are evolving and ACP could not be invited to the negotiating table.
The ACP side considered that Article 12 consultations had not worked properly and the balance had not been respected since ACP interests were not duly reflected in these other bilateral FTA negotiations.
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5.ACP-EU trade regimes issues
The ACP side introduced the point under which four items – commodities, rules of origin, the impact of the Lisbon Treaty on trade policy and good governance in tax matters – were to be discussed. On commodities, the ACP side wished to have more information on the Geneva Agreement on Bananas.
(a) Commodities
The Commission explained that WTO members appreciated the conclusion of the banana deal in December and the side-letter on tropical products and preference erosion. The Geneva Agreement had removed one of the major stumbling blocks in the DDA's agricultural negotiations and settled the longest-running WTO dispute. In recent consultations, both China and India had criticised the agreement, but according to the EU side, these stances are largely tactical posturing in the wider DDA negotiations. The Commission encouraged the ACP to continue defending the deal consistently and convincingly as the coordinator of the ACP Group in Geneva, the Ambassador of Mauritius, had done.
The Commission informed members of the Sub-Committee of the progress made on the Banana Accompanying Measures since last December 2009 when Commissioners Fischer Boel and De Gucht made a commitment towards the ACP, including the legal package and the accompanying measures. Both parts had now been adopted by the Commission and Council and now required approval by the European Parliament. 10 countries were identified as beneficiaries and an amount of 190 million euros for 2010-13 was proposed for the measures, with an additional 10 million euros to be mobilised in the course of annual budget procedures.
The ACP side felt that the global agreement on bananas was not getting the recognition that had been expected within the WTO Doha Round negotiation process.
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(b) Rules of Origin
On Rules of Origin, the ACP side stated that no satisfactory solution to the cumulation problem had yet been found and that the requirement to conclude administrative co-operation agreements with other EPA entities was posing serious problems to some major ACP exporters. The ACP also requested some information on the ongoing work of finalising the revision of preferential rules of origin.
The Commission representative agreed that there was no easy answer to the questions raised. He referred to the good response that EPAs can provide in terms of relaxing Rules of Origin; however, different regions were making different requests and as a consequence the origin regimes were developing in diverging directions, reducing the possibilities for cumulation. The Commission said it was drawing ACP attention to this in every negotiation, but was aware that trade-offs are mostly made to the benefit of "relaxation" and the detriment of "cumulation".
The representative of Mauritius raised some questions concerning the ongoing GSP consultation, and whether Rules of Origin would be more relaxed in this context. In particular, he suggested that cumulation could be possible with all LDC countries for which the EU provides full duty-free quota-free access anyway.
The Commission took note of these technical suggestions and agreed to reflect on them.
(c) Impact of the Lisbon Treaty on trade policy
The ACP side invited the Commission representative to provide information on the implication of the Lisbon Treaty on EU trade policy, in particular with a view to the EPA negotiations.
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The Commission informed the Sub-Committee that the Treaty of Lisbon brought greater coherence between external and trade policy as result of the merger of the EC and the EU as well as the integration of trade policy under the umbrella of the Union's external action. In the field of external action, the Union was now represented by the High Representative and Vice President of the Commission Catherine Ashton, who would be assisted by the European External Action Services and the EU delegations. The Treaty increased legitimacy through a more formal role for the EP and improved efficiency through more qualified-majority voting. The new Treaty also created a clearer framework for co-legislation and more systematic classification of legal acts. Concerning trade, the scope of trade policy had also been extended to include direct investment.
The Commission concluded that nothing much would change regarding the EPAs, since already under the previous legal arrangements, international agreements based on mixed competences required the assent (now consent) of the European Parliament (which had already approved the CARIFORUM and Ivory Coast agreements).
(d) Good governance in tax matters
The ACP side sought further information on the Commission Communication on "Promoting Good Governance in Tax Matters".
The Commission representative explained that the Commission issued this Communication in April 2009 to improve international tax cooperation so as to tackle tax evasion and avoidance on as broad a geographical basis as possible. This was expected to contribute to the smooth functioning of the Internal Market and of the cross-border exchanges between the EU and its partner countries.
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This Communication established a closer link between tax and development policies and had received been supported by both the Council and the European Parliament. Therefore, the Commission would adopt a Communication on 20 April 2010 on "Tax and Development: Cooperating with Developing Countries on Promoting Good Governance in Tax Matters". This would improve synergies between tax and development polices by suggesting ways in which the EU could assist developing countries in building efficient, fair and sustainable tax systems and administrations. This would also contribute to enhancing domestic resource mobilisation while further promoting the EU principles of good governance in tax matters.
In this context, the Commission welcomed the conclusion of negotiations on the 2nd revision of the Cotonou Agreement (ACP-EU Partnership Agreement) in March 2010 with a provision allowing EU support for the implementation of international best practices in tax matters, including the principle of transparency and exchange of information. The Commission concluded by saying that it was now looking forward to assisting developing countries in implementing the principles of good governance in the tax area.
The ACP thanked the Commission for the comprehensive information provided on commodities, rules of origin, the impact of the Lisbon Treaty on trade policy and on good governance in tax matters.
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6.Update on WTO issues
The ACP side observed that no significant progress has been made recently in the WTO Doha Round negotiations. The ACP's ambitions are to conclude a development oriented round that takes into account ACP interests. ACPs called on the EU to continue to lend its support to these aspirations.
The representative of the Seychelles expressed concern on the potential detrimental effects of current WTO proposals for fish, which could reduce tariffs from 24 to 6%.
The representative of Sudan reminded members of the Sub-Committee of the importance of finding a solution to the issue of cotton and called on the EU to be supportive in this respect.
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The Commission recalled that the Doha Round faced major political difficulties in moving forward on the key outstanding issues. Europe was continuing to push for such progress and hoped to work with the ACP in this respect. The Doha package contained clear development gains legitimately expected of the Round, resulting from extensive negotiation and compromise: global farm trade would be reformed in a way not imagined twenty years ago. Secondly, Doha would also mean a trade facilitation agreement which could notably help the poorest, landlocked countries and could drive down the costs of trading.
The December outcome on bananas was proof of the common commitment to the Doha Round. It was expected to deliver a fair and lasting solution that secured for banana exporters the economic certainty and legal clarity they needed for long term investment in ACP countries. The Commission recognised that the Round needed to provide a solution to the satisfaction of the countries relying on exports of cotton, before it could be finalised. But at long last, the prospect of a fair outcome on cotton was within reach.
Beyond Agriculture and NAMA, the Commission explained that more could be done to build on this development premium – in services in particular, or in IPR, where a good outcome on GIs and biodiversity issues would be fundamental.
Responding to a question by the representative of the Seychelles on fisheries tariffs, the Commission declared that it was willing to consider these problems and engage on the issue in Geneva.
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7.Trade related capacity building programmes
The Commission provided information on a number of programmes:
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a.Trade.com programme;
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b.Multilateral trading system Programme (WTO and EIF);
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c.Pesticides Initiatives Programme (PIP);
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d.Food and feed;
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e.SFP Fisheries programme; and
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f.All ACP Agricultural Commodities Programme (AAACP).
Currently, Intra ACP co-operation financed 6 programmes for around 175 million euros, which were running smoothly. They fostered capacity-building in the areas of trade policy formulation, implementation of trade agreements, and compliance with sanitary, phytosanitary norms and technical standards. Three programmes were to be appraised for 70 million euros under the 10th EDF.
The ACP side reiterated its gratitude for the assistance provided in the past and called on the Commission to ensure that activities of the Trade.Com programme could continue after the end of the present programme, since the programme had been positively perceived by all stakeholders. The ACP pointed to the substantial available reserve of EDF funding from which a successor programme should be funded. This call was supported by the representatives of Mauritius, Samoa and Jamaica.
The representatives of Mauritius and Fiji also informed the Sub-Committee that regional funding of activities to continue the SFP fisheries programme had not materialised and asked for continued funding on the intra-ACP level.
The Commission responded that the Mid-Term Review could provide an opportunity for review and identification of new funding. However, the 10th EDF Intra-ACP strategy document for the moment did not provide for the continuation of Trade.Com programme beyond its implementation phase. The Commission was discussing with the ACP Secretariat the possibilities of finding financial resources to continue the programme. The Commission representative agreed that the programme was indeed perceived positively. It was also important for the Commission to limit any gaps between programmes as much as possible.
The ACP side thanked the Commission for this information.
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8.Preparations for the Joint ACP-EU Ministerial Trade Committee (JMTC).
The ACP side expressed disappointment that the JMTC could not be held, as initially envisaged, on 5 May.
The Commission shared their frustration, but confirmed that it would not be possible to organise this event before the Joint Council of Ouagadougou on 4 June. The Commission representative reiterated the proposal to schedule the JMTC for the second half of the year.
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10.Any other business.
None.
The meeting was adjourned at 13.00.
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